Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Economist’

Clear danger: the City and Brexit

Posted by hkarner - 19. Oktober 2017

Date: 18-10-2017

Source: The Economist

Clearing-houses, which ensure a derivatives contract is honoured even if one side goes bust, are an early financial-sector target of Brexit hand-wringing. London’s clearing-houses, of which the largest is LCH, owned by the London Stock Exchange Group, handle 75% of global interest-rate swaps in euros and 97% of those in dollars.

To ensure the euro zone’s post-Brexit financial stability, the European Union proposes either direct supervision over London’s clearing-houses or the forced relocation of euro-denominated trades—which Xavier Rolet, the LSEG’s boss, warned yesterday could cost EU firms €20bn ($23.4bn) a year. Den Rest des Beitrags lesen »

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Brexit will give the derivatives market a nasty headache

Posted by hkarner - 16. Oktober 2017

Date: 14-10-2017
Source: The Economist

The legal status of thousands of contracts may be thrown into doubt

FOR all the talk of banks deserting London as Britain’s departure from the EU looms, relatively little attention has been paid to the derivatives market. Yet this is a crucial area of business for British-based banks. The City handles a big chunk of the market, including 39% of the market in interest-rate derivatives alone, where global daily turnover averages $3trn. The rest of the EU accounts for just 9%. Brexit seems sure to cause significant disruption. Mark Carney, the governor of the Bank of England, recently warned that the very “legal validity” of pre-existing derivatives contracts could be put into question. Den Rest des Beitrags lesen »

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Buried treasure: A new study details the wealth hidden in tax havens

Posted by hkarner - 8. Oktober 2017

Date: 05-10-2017
Source: The Economist

But even the new data are patchy and do not fully account for all wealth

SWITZERLAND, which developed cross-border wealth-management in the 1920s, was once in a league of its own as a tax haven. Since the 1980s, however, tax-dodgers have been spoilt for choice: they can hide assets anywhere from the Bahamas to Hong Kong. The percentage of global wealth held offshore has increased dramatically. But it has been hard to say how much that is, and who owns it.

Few offshore centres used to disclose such data. But in 2016 many authorised the Bank for International Settlements (BIS) to make banking statistics publicly available. Using these data, a new study by Annette Alstadsaeter, Niels Johannesen and Gabriel Zucman, three economists, concludes that tax havens hoard wealth equivalent to about 10% of global GDP. This average masks big variations. Russian assets worth 50% of GDP are held offshore; countries such as Venezuela, Saudi Arabia and the United Arab Emirates climb into the 60-70% range. Britain and continental Europe come in at 15%, but Scandinavia at only a few per cent. Den Rest des Beitrags lesen »

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All about Boris: Is Boris Johnson really unsackable?

Posted by hkarner - 8. Oktober 2017

Date: 05-10-2017
Source: The Economist
One of the great puzzles of politics is how the foreign secretary keeps his job

BORIS JOHNSON is a serial problem for the Conservative Party’s high command. He is always plotting behind the scenes to get the top job. He has been flagrantly disloyal on the most divisive issue facing the government. Days before Theresa May delivered a speech in Florence laying out the government’s considered position on Brexit, he published an article laying down “red lines” for Britain to keep within during its negotiation. He is also gaffe-prone. The day before Mrs May’s big speech to the party conference he joked, to nervous laughter from his fellow Tories, that Sirte, in northern Libya, could become “the next Dubai” if they could “clear the dead bodies away”.

So why doesn’t the prime minister sack him? One reason, as with almost everything in British politics, lies in Brexit. Sacking a man whose allies call him the “godfather of Brexit” might upset the delicate balance of forces in the cabinet. Another reason is Mr Johnson’s popularity in his party. A YouGov poll found that he is favourite among party members to be the next leader. The Daily Telegraph, a Tory-leaning newspaper, splashed his conference speech on its cover with the headline, “The roaring lion”. Mr Johnson knows how to cheer up the Conservative troops at a time when it is all too easy to give in to despair. Den Rest des Beitrags lesen »

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Australia admits more migrants than any other big Western country

Posted by hkarner - 8. Oktober 2017

Date: 06-10-2017
Source: The Economist
Subject: Almost one in three

And Australians still like them

“THE prime reason for the decline in living standards for many Australian workers is our staggering population growth,” thunders Dick Smith, a campaigning millionaire, in an apocalyptic manifesto. He is right about the staggering growth. The number of children the average Australian woman has fell below two in the 1970s and has stayed there. Yet since then Australia’s population has grown by 70%, thanks almost entirely to immigration. Over 28% of today’s residents were born overseas—a higher share than in Canada or New Zealand, let alone Britain or America (see chart 1). The number of newcomers continues to grow. Net overseas migration (a measure of immigrants minus departing Aussies) has nearly doubled since 2000. Den Rest des Beitrags lesen »

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Out of the traps: Emerging markets are up and running

Posted by hkarner - 7. Oktober 2017

Date: 05-10-2017
Source: The Economist

After a rocky few years, emerging markets have become more mature and resilient, says Simon Cox. But along with the drama, some of their dynamism has gone

IN 1875 THE Ottoman Empire defaulted on half its foreign debt, a victim of the “first major debt crisis of the developing world”, according to one account of the mess. Its creditors, led by the Imperial Ottoman Bank, forced the empire’s grand vizier to accept a humiliating solution. Rather than wait to be repaid out of tax revenues, they won the right to collect half a dozen taxes themselves, including stamp duty and duties on alcohol. After 15 years of tax farming, the Imperial Ottoman Bank was comfortable enough to build impressive new headquarters in Istanbul, neo-orientalist in style on one side and neoclassical on the other.

Since long before the term was invented, emerging markets have provided a rich source of both peril and profit. That financial crisis in 1875 was followed by many others, including a hatful in Turkey. And like the Imperial Ottoman Bank, investors with strong stomachs have often profited the most from emerging markets at their worst. Hedge funds that bought impaired Argentine debt for roughly 20 cents on the dollar after its default in 2001 extracted a handsome settlement from its new government last year, worth perhaps ten times what they paid, according to some estimates. Den Rest des Beitrags lesen »

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Commodities are not always bad for you

Posted by hkarner - 7. Oktober 2017

Date: 06-10-2017
Source: The Economist
Subject: A drag, not a curse

Raw materials need not undermine the countries that export them

THE LAMP POSTS in Kliptown, South Africa, do not all stand up straight. One lists awkwardly, laden with cables carrying stolen electricity to a squatters’ settlement nearby. Many families in this suburb of Soweto, a formerly black township in greater Johannesburg, are still crammed into makeshift housing. When it is hot outside, the temperature inside is “times two”, says one resident, who shares six rooms with 20 others. And when it turns cold, the chill inside is also “times two”.

On the other side of the railway tracks the government is investing heavily in Walter Sisulu Square, where in 1955 the African National Congress (ANC) and its allies adopted the Freedom Charter, a statement of principles for a post-apartheid nation. The charter’s commitments, written in stone on a monument in the square, include demolishing slums and building well-lit suburbs. They also include transferring ownership of the mineral wealth beneath the soil to the people. The contrast between what the charter says and what the slum itself reveals tells you how broken the system is, says one squatter. Den Rest des Beitrags lesen »

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The European Union’s Neoliberal Dilemma

Posted by hkarner - 6. Oktober 2017

Date: 05-10-2017
Source: The Wall Street Journal By Simon Nixon

The free flow of capital and people seemed to deliver only winners until the economic crisis revealed competition’s downside in many countries

Those who say the European Union is a neoliberal plot are, of course, largely right. Any single market that allows free movement of capital and people by its very nature pits country against country, region against region and town against town in a competition to attract investment and productive people. The rewards flow to those that offer the best business environment, high-quality infrastructure and the right mix of skills. Those that get it wrong face stagnation or decline.

Until the global financial crisis, the EU’s free movement of capital and people appeared to deliver only winners. Countries in Northern and Western Europe that had plenty of capital benefited from the flow of people to plug gaps in their growing job markets, boosting growth and living standards. And countries in Eastern Europe that had large pools of low-wage workers benefited from the free movement of capital as companies looked to outsource manufacturing. Meanwhile, those countries, primarily in Southern Europe, that weren’t particularly attractive to people or corporate capital were at least able to tap booming financial markets to finance lavish government spending. The result was rising and converging living standards across the EU. Den Rest des Beitrags lesen »

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Manias, panics and Initial Coin Offerings

Posted by hkarner - 6. Oktober 2017

Date: 05-10-2017
Source: The Economist: Free exchange

Crypto-coin mania illustrates the crazy and not-so-crazy sides of bubbles

EVERY market mania reaches a point when pitches to would-be investors enter the realm of the surreal. So it goes for “initial coin offerings”, or ICOs. A new one by a firm called POW invites Facebook users to claim tokens for nothing; when they later become convertible into other tokens, the first to take advantage of the offer could “become worth $124bn…making them the richest person on Earth”, the blurb says. Not a bad return for no money invested and no risk borne. However bizarre, bubbles are hard to resist: no one wants to be the only one of their friends left out. They can also be financially ruinous. But gambling on a craze, even a highly dubious one, can be about more than blind greed. Den Rest des Beitrags lesen »

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The proliferation of high-net-worth individuals

Posted by hkarner - 6. Oktober 2017

Date: 05-10-2017
Source: The Economist

The highest proportion is concentrated in the Asia-Pacific region

The global number of high-net-worth individuals (HNWIs) grew by 7.5% to 16.5m last year, according to the 2017 World Wealth Report by Capgemini, a consulting firm.

HNWI have at least $1m in investable assets, excluding their main home, its contents and collectable items.

Total HNWI wealth came to $63.5trn last year, with the highest proportion concentrated in the Asia-Pacific region.

The expansion of wealth in the Asian-Pacific region slowed to 8.2% year-on-year though, partly owing to declines in the performance of stockmarkets in China and Japan.

For global HNWI wealth to reach over $100trn by 2025, Asian wealth (the biggest source of new future growth) will need to increase by about 9.4% a year.

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